Best World Q2 net profit inches down 0.6% to S$38.7 million

BEST World International posted a 0.6 per cent drop in net profit to S$38.7 million for its second quarter ended June, from S$38.9 million in the previous corresponding period.

This came as the mainboard-listed group recorded slightly lower revenue and higher cost of sales, partially offset by higher interest income.

Earnings per share (EPS) stood at S$0.089 for the period, up from S$0.0806 in the same period last year, the group said in its financial results released late on Wednesday (Aug 9).

Revenue for Q2 slipped 1.3 per cent on the year to S$128.8 million from S$130.5 million.

The group recorded a drop in revenue contributions from its franchise segment on weaker-than-expected post-Covid economic recovery in China, macroeconomic challenges and cautious consumer spending.

Cost of sales rose 8.4 per cent to S$26.5 million during the quarter on higher packaging charges and overheads linked to the group’s Tuas manufacturing facility.

Distribution costs for the quarter were also up 9.2 per cent to S$33 million, from S$30.2 million in the same period a year earlier.

Best World attributed the increase to higher freelance commission, event, convention and exhibition expenses, even though sales-related expenses from its franchise segment were lower.

Interest income for the quarter, meanwhile, was up 92.2 per cent on the year to S$3.1 million from S$1.6 million.

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The group recorded higher interest from its cash placed in structured and fixed deposits with banks.

For the six months ended Jun 30, net profit was down 11 per cent on the year to S$59.2 million from S$66.5 million, translating to an EPS of S$0.1361, from S$0.1313 the same period last year.

Revenue for the six-month period ended June fell 15.2 per cent to S$208.7 million, from S$246.1 million the same period a year ago.

“The decline in China was offset by improvements in our direct-selling segment which narrowed revenue decline for H1 2023 to 15.2 per cent, versus a 30.8 per cent decline in Q1 2023,” Best World added.

No dividend was declared for the period, unchanged from the year before.

Best World shares were trading 4.4 per cent or S$0.07 higher at S$1.67 as at 10.52 am on Thursday.